Jazz's Xywav scores the first FDA nod in idiopathic hypersomnia, and big sales could follow

Dublin-based Jazz Pharmaceuticals dominates the sleep disorder market and has enhanced it with an FDA approval for Xywav. (Pixabay)

Those who have the sleep disorder idiopathic hypersomnia finally have relief. But it comes in the form of a medicine with tight regulations and safety concerns.

On Thursday, Jazz Pharmaceuticals secured an FDA approval for Xywav, the first drug approved for the confounding and dangerous condition that can cause unplanned lapses into sleep or drowsiness—even after a prolonged night’s sleep. Sufferers can be suddenly affected while working or driving. In the United States, 37,000 have been diagnosed with idiopathic hypersomnia.

Xywav is an oral treatment with once- or twice-nightly options that promotes deeper, restorative sleep. Thursday's FDA approval for Xywav follows a July 2020 nod in cataplexy, or excessive daytime sleepiness.

The FDA blessing strengthens Jazz’s hold on the sleep disorder market. The Dublin, Ireland-based company brought its flagship Xyrem to the market in 2002, and that med remains the premiere treatment for cataplexy and narcolepsy. It generated sales of $1.74 billion last year, but with the drug losing exclusivity in 2023, Jazz hopes patients will switch to Xywav.

In a note to investors, Daniel Busby, an analyst for RBC Capital Markets, said the new Xywav approval is a "meaningful opportunity."

“We model peak sales for Xywav in IH of $541 million in 2025, which assumes 20% peak penetration," Busby wrote. "Bigger picture, we view this as another important step in Jazz’s diversification story away from Xyrem.”

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For their part, Jefferies analysts pegged Xywav’s annual potential in the new use at $450 million or more. That could be a conservative estimate due to an under-diagnoses of patients, the analysts said.

The key component of both Xyrem and Xywav is gamma-hydroxybutyrate, which was used in the 1960s to induce drowsiness during childbirth, The New York Times reports. Decades later an illegal version of the treatment became known as the “club drug” or “date rape drug," according to the newspaper. At lower doses it can provide euphoria and sexual arousal. At higher doses it can induce unconsciousness.    

Xyrem and Xywav can come with a host of side effects including fatigue, anxiety, nausea, depression, sleepwalking, hallucinations, insomnia, tremors and dizziness. Xywav’s label warns that as a central nervous system depressant, it has potential for abuse and misuse. The drug only is available through a restricted program, which requires the enrollment of prescribers and patients.

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After Xywav gets through the FDA’s Risk Evaluation and Mitigation Strategies (REMS) implementation process, it will be ready for launch. The company anticipates that before the end of this year.   

It is the fifth product launch for Jazz in the last two years, including another sleep medicine, Sunosi, for the treatment of persistent daytime sleepiness.